In 2011, the median home price in the central part of Los Angeles were essentially flat at around $850,000. The neighborhoods included are:

Beverly Center - Miracle Mile

Hancock Park - Wilshire

Hollywood Hills East

Los Feliz

Silver Lake - Echo Park

Sunset Strip - Hollywood Hills West

West Hollywood

What does this mean?

The fact that the median sale price is moving sideways means there is market stability. Sellers can sell today without the fear they are "leaving money on the table". Buyers can purchase without the fear that they must "jump in today" or be faced with risingpricestomorrow. But stablemarketsdon't always remainstable for long...

In 2011, the months' supply of inventorydeclined steadily from 9.3 months to 5.3 months -- a significant 41%. (Months' supply of inventory is a measure of how many months it would take to sellall the homes currently on the market.)

What does this mean?

That the market is "tightening up". Although prices are currentlystable, properties are being "absorbed" faster on the market, as buyerschasefewer and fewer properties

What about 2012? Where are we heading?

Our prediction is that prices will rise in 2012, even if by a small increment. Our reasoning is that an inevitable result of this decline in the months' supply of inventory is an increase in prices.

This assumes a stablefinancing environment, but the Fed has given every indication that they will maintain interest rates at current levels.

Other market forces may intervene (increase in short sales / foreclosures as a percentage of overall market, financial crisis #2 spurred by the euro, etc.), but current datasupports a modest to partially sunnyhome market in 2012 this desirable section of Los Angeles.

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About Adner Realty Group

Jamie Adner is a Broker Associate at Keller Williams Realty Hollywood Hills, specializing in residential and commercial sales and consulting. He is a member of the Agent Leadership Council at the Hollywood Hills office and chairs the Financial Planning Committee. Jamie received his MBA from the Anderson School of Management at UCLA and holds a BS in Neuroscience and a BA in Semiotics from Brown University, where he graduated Phi Beta Kappa, Magna Cum Laude. Jamie is licensed as a Real Estate Broker in the state of California.